The second half

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RYAN   By Guest Blogger Ryan Lewenza
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I’m happy to have that first half of the year over. It was a real stinker!

We saw the S&P 500 and global equities fall by roughly 20% in the first half, marking the worst first half for stocks since 1970. The TSX fell a gentler 11% on the back of higher commodity prices.

Balanced portfolios were also hit by both declining stock and bond prices, however, the balanced portfolio did what it was supposed to do, falling by roughly half the decline of global equity prices. Balanced portfolios are not immune to these big drawdowns but they definitely lessen the blow if managed correctly.

We were calling for a lot of market volatility this year due largely to the central bank hikes we saw coming. But Putin’s incredibly stupid and barbaric decision to invade Ukraine really put a wrench into things, which greatly contributed to the market weakness, in our view.

A Rough First Half

Source: Stockcharts.com, Turner Investments

What caused this big sell-off?

Easy, rising fears of a recession brought on by the rate hikes and Ukraine war. Well those fears were confirmed this week with the release of second quarter US GDP. The US economy experienced a small contraction in the second quarter of -0.9%, following the -1.6% contraction in the first quarter.

With that second quarter contraction the US is now in a technical recession, which is defined as two consecutive quarters of negative growth. There’s some debate around whether to define this as a recession since we haven’t witnessed the typical job losses and decline in industrial production. I’m a bit old school and have always viewed two consecutive quarters of contraction as a recession so it fits my criteria, even if the contractions are modest.

The rising interest rates have been the main contributor to the weak stock market returns this year. This can be seen perfectly in the chart below.

In the chart I overlay the US 10-year bond yield with the forward P/E for the S&P 500. Note the US 10-year yield is inverted to better show the relationship of higher interest rates and contracting P/E/prices. With the US 10-year surging from a low of 1.1% last year to a recent peak of 3.5% (now at 2.6%), this has weighed on the stock market and led to a contraction in the P/E.

To begin the year the forward P/E for the S&P 500 was at 21x and has declined down to a low of 16x, just as the US 10-year hit a peak of 3.5%. We’ve seen the US 10-year yield decline down to 2.6% since the peak, and, given this tight relationship, we’ve seen stock prices and the P/E move back up. Clearly interest rates are having a big impact on the equity markets right now.

S&P 500 and US 10-Year Bond Yield

Source: Bloomberg, Turner Investments

So the question is, where do stocks go in the second half?

I looked back at weak first half’s when the S&P 500 declined by 15% or more. There have been five instances (1970, 1962, 1940, 1939, and 1932) of when this occurred. I then examined returns of those periods for the second half and the results are promising.

On average, the S&P 500 returns 23.8% in the second half after a 15% or greater decline in the first half. Now it’s a small sample size so I prefer to use median returns in this case, with the median return for the S&P 500 of 15.2%. This historical data suggests the potential for a rebound in H2/22. We’ve seen a nice rebound in July so, maybe, just maybe, we’re seeing the beginnings of that expected stronger half.

S&P 500 Performance Following Weak First Half

Source: Stockcharts.com, Turner Investments

Looking further out into 2023, I see the potential for a solid year given these key factors:

* First, the stock market leads the economy by 6-9 months so with the US triggering a technical recession and the stock market correctly pricing this in over the last 6-9 months, we should see the stock market starting to recover later this year and into 2023. This is key! Even if there is more economic pain ahead the stock market has already priced a lot of this in. So, in my view, it’s not a matter of if the stock market will recovery, rather when.
* Second, there are two very bullish market cycles for 2023 – the Presidential Cycle and US Mid-term Election Cycle.
* The Presidential Cycle posits that there is a loose connection between the US President’s four-year term and the US stock markets. President’s want to get re-elected so they try to goose the economy in years 2 and 3 to improve their odds of a re-election. This is why years 3 tend to be the best for stock returns with the S&P 500 up on average 16% and is positive 88% of the time.
* For the US Mid-term Election Cycle, the S&P 500 returns on average 16.3% 12 months following mid-terms (Nov) and since 1962 the S&P 500 has been positive 100% of the time.
* Those are some pretty bullish statistics going into 2023.

S&P 500 Performance over the Presidential Cycle

Source: Stockcharts.com, Turner Investments

In summary, I see a stronger second half and potentially a solid 2023 based on a recovering economy and some very bullish market cycles. So chill-out this long weekend, enjoy a few pops and rest assured better days lie ahead for the equity markets and portfolios.

Ryan Lewenza, CFA, CMT is a Partner and Portfolio Manager with Turner Investments, and a Senior Investment Advisor, Private Client Group, of Raymond James Ltd.

 

84 comments ↓

#1 Paddy on 07.30.22 at 11:25 am

So we are due for a rally 2023, Roger that. That’s a big 10-4 rubber ducky.

#2 Philco on 07.30.22 at 11:43 am

Thank you Ryan.
Philco said last fall. “Peeps to bullish”
Feb I said “EVERYTHING Looks priced to perfection and I love sales”
Fri I grabbed $100k+ in ZPR and and a few of my fav REITS. DIR.un and BEI.un are a couple.
Charts based and are breaking up.
Thanks for your and Garths guidance as I don’t have time to keep up. I can do one stop here and cut to chase on ongoing market info.

#3 Søren Angst on 07.30.22 at 11:50 am

yeah 1932. yeah Cycles.

I believe you have it Ryan.

I think it has started, in between times now with probably 1 step back, 2 forward.

My Threadbare Portfolio as of the Fri close *:

YTD stock price appreciation +5.5% **
YTD avg Dividend Yield +28.8%

One more…

yeah Doug’s oil

—————-

* Garth I am not taking your advice at looking at my portfolio infrequently. I want to savour the comeback

every.last.second.of.it.

[Though, I did cut back on BNN a lot]

** Lazarus. Was -1.5% for a couple of days, whew. Happy with the paltry gain I have, elated actually.

#4 crowdedelevatorfartz on 07.30.22 at 12:00 pm

Interesting stats.
Fingers crossed.

It’ll be interesting to see what Trump does in the next few months.
Is he’s going to run or sit this one out.
That Presidential curve ball is definitely a market maligner.
Either way the last few years of No Twitter/No Trump quiet were a blessing.

#5 Søren Angst on 07.30.22 at 12:08 pm

TSE doing OK like you say but still…

Big 5 Cdn Banks in a YTD Return funk, 31.7% of the Index
https://www.google.com/finance/quote/BNS:TSE?comparison=TSE%3ATD%2CTSE%3ACM%2CTSE%3ARY%2CTSE%3ABMO&window=YTD

And then there is Shopify *
https://www.google.com/finance/quote/SHOP:TSE?window=YTD

Thank God for Big 5 🍁 oil, 19% of the Index.
https://www.google.com/finance/quote/ENB:TSE?comparison=TSE%3ATRP%2CTSE%3ASU%2CTSE%3APPL%2CTSE%3ACVE&window=YTD

———–

Banks, Shopify Cdn ETF Boat Anchors at present. I think the Index has a long way to go before it begins to gain, end of year like you say? 2023?

* Shopify rally throws TSX ETFs out of whack
https://www.bnnbloomberg.ca/shopify-rally-throws-tsx-etfs-out-of-whack-1.1473291

#6 THE DANDADA on 07.30.22 at 12:13 pm

Get ready for the melt-up!!
It’s coming very soon.

S&P to 6000
DOW to 45000
Nasdaq to 20000
Gold to 3000
Silver to 50

https://www.youtube.com/watch?v=MAYFgHE7cAo&feature=youtu.be

#7 Sail Away on 07.30.22 at 12:33 pm

Thanks Ryan, and… I agree. Up she goes.

#8 Philco on 07.30.22 at 12:33 pm

DIR.un yield 5.55% :-)
ZPR 5.23% while you wait off over 10% back to levels of March 2021.

#9 Stone on 07.30.22 at 12:47 pm

#114 Dragonfly58 on 07.30.22 at 11:27 am
One more little thing Stone. You seem to think it is only Old Stock Canadians that can be racist. Like I previously mentioned I have worked along side a good number of immigrants. ( over 50% of the workforce at my employer }. And for over 30 years at my last employer.
Once you spend months and years with them you realize quite a few of them have brought the attitudes along from the old country. At times racist, and often sexist. But most of all very class prejudiced.
The way they treat people from the same home country that happen to come from a lower strata of the home pecking order is at times quite shocking.
Several times I had to have private conversations with immigrant individuals that here in Canada that sort of disrespect of your percieved social inferiors just didn’t fly in Canada.
Also sexism and homophobia { often the Middle Eastern and Eastern European immigrants } that made you think more of a Southern U.S. trailer park than well educated , professional immigrants. But there it was , in plain view.
I am a pretty liberal Canadian, { socially, not the party } so posibly a bit more sensitive to this sort of thing than some old stock Canadians. But some of the things I saw over the decades was quite an eye opener regarding how much baggage some of these immigrants bring with them.

———

My focus was solely on you and your actions.

So now you want to sink lower and start pointing the fingers at other people and groups? Did any of them make the racist comments you made on yesterday’s blog?

No.

Focus on yourself. You have problems you need to deal with. I hope you find some calm and contentment however I think you’ll have difficulty with achieving that until you finally realize you’re actually a racist and do something concrete to resolve it.

Acceptance is the path to peace.

#10 baloney Sandwitch on 07.30.22 at 12:52 pm

Earnings are still dropping. Intel just reported a stinker. I suggest hold your firepower until the winter till there is clear evidence that Fed/boc are done with this round of hiking and inflation numbers are coming down.

#11 Andrewski on 07.30.22 at 1:12 pm

Great analysis Ryan. If only the media didn’t scream Chicken Little to scare their financially illiterate readers/listeners/viewers to further heighten fear. It seems like all we currently hear is recession, recession, recession.

#12 Philco on 07.30.22 at 1:26 pm

Very interesting what’s going on in China and hopefully the end of the CCP. Housing falling apart there.
Huawei’s gone here thank god. We should not have been buying products from the CCP Mr T2…
We are deploying Nokia cell base stations :-)
https://www.youtube.com/watch?v=YBBnQmRcRI4

#13 TurnerNation on 07.30.22 at 1:28 pm

Consumer Discretionary ETF is coming alive.
https://finviz.com/quote.ashx?t=XLY

—–
A heritage fire when everything was shut down, under cover in March 2020.

https://www.blogto.com/city/2020/03/heritage-building-downtown-toronto-fire-second-time-week/

——
PP of course I eat using hands. Pizza, sandwich, hamburger, fries, snacks, fruit. Just not…eggs.

—–

L.A. Landlords, They own nothing and are happy? System Turned against them, March 2020.

https://abc7.com/evictions-moratorium-los-angeles-city-council/12077354/
Despite pleas from frustrated landlords, the Los Angeles City Council voted Wednesday to extend the city’s emergency declaration allowing its eviction moratorium to continue.


— Travel. How fast the biometric/A.I. solution is rolled out after a sudden crisis. How ’bout that.

https://www.blogto.com/travel/2022/07/e-gate-toronto-pearson-airport-congestion/
#CBSA is testing NEW eGates to deliver a smoother and faster border experience!

#14 Stone on 07.30.22 at 1:31 pm

Ryan, nice summary.

Considering your level of confidence for the rest of 2022 as well as 2023, where would be the harm in changing a 60/40 portfolio to 70/30 or maybe 75/25?

Take advantage of the circumstances and ride the equities sucker up a bit more. Rebalancing helps to amplify the swing up. Extending the rebalancing by changing the portfolio by 5%-10% in favour of equities would amplify things further.

You still hold a good 25%-30% fixed income in case regardless. In no way am I saying that anyone should be a cowboy – it’s just things swung down quite a bit this year, why not take full advantage of it?

#15 Philco on 07.30.22 at 1:33 pm

House ownership in Canada:
In Toronto 18% apparently cancelled their listings as they don’t need to sell.
There’s a large population that own their home outright.
That will support the market. No USA 2009 here in my view. Just a haircut well needed.

#16 Elon Fanboy on 07.30.22 at 1:34 pm

“There’s some debate around whether to define this as a recession since we haven’t witnessed the typical job losses and decline in industrial production”.

If Trump were still President you can be damn sure every media outlet would be calling it a recession….with bells on, lol.

#17 Victor Llearna on 07.30.22 at 1:56 pm

Considering how Trudeau runs canada its shocking that the Canadian TSX isn’t back down in the 11000s back where it was 10 years ago.

#18 Dragonfly58 on 07.30.22 at 2:08 pm

Stone, you don’t have a clue about me. Not a clue.
Perhaps some would interpret my comments as racist, you obviously have.
Considering I worked with a large number of immigrants over a long period of time and never had any suggestion from any quarter that I was a racist strikes me as more important than a judgement you came to based on a couple of internet comments.
You are the one with problems.
Such a harsh , snap judgement arrived at based on almost nothing.
I will give that we all have a certain amount of cultural bias based on our life experience.
But if you actually spent more than 20 seconds getting to know me you would see that it is your own preconceived notions that led to your statement. I know the life I live is far from perfect , but racist ? You are so far off the reality of my life you redicule yourself.

#19 Ryan Lewenza on 07.30.22 at 2:09 pm

Baloney Sandwich “ Earnings are still dropping. Intel just reported a stinker. I suggest hold your firepower until the winter till there is clear evidence that Fed/boc are done with this round of hiking and inflation numbers are coming down.”

That’s one thing I’m watching closely. Typically earnings fall around 20% in recessions and all the decline in stock prices so far has been due to the PE compression. I guess it depends on how deep and long this recession is. But I see an economic rebound and therefore higher earnings next year so I go back to my earlier comment that it’s a matter of when not if markets will recover. – Ryan L

#20 ElGatoNeroYVR on 07.30.22 at 2:21 pm

#1 Paddy on 07.30.22 at 11:25 am
So we are due for a rally 2023, Roger that. That’s a big 10-4 rubber ducky.
=============
So we are expecting a big market convoy across the USA , hopefully it crosses into Canada as well ,or starts up here.

#21 the Jaguar on 07.30.22 at 2:31 pm

* The Presidential Cycle posits that there is a loose connection between the US President’s four-year term and the US stock markets. President’s want to get re-elected so they try to goose the economy in years 2 and 3 to improve their odds of a re-election.* – RL+++

I bow to your expertise Monsieur Lewenza, however even ill informed Jaguars wonder if the inflation genie will be put back into the bottle by then. Of the 60 rate hikes that have happened since 1980, 32% have occurred in election years. And do any of those times in history compare to the “perfect storm” we presently find ourselves in with post pandemic supply chain woes, war in eastern europe, trouble brewing in East Asia, and social unrest everywhere one looks including sleepy little Canada. I would add changing trade alliances and emerging new world orders into that flotsam jetsam.

My spidey sense also tells me the Dems are rolling out a new, not so subtle strategy to get Joe B. to step aside.

Hiding in plain sight, it’s “Joe’s got to go”, everywhere I look. I seriously doubt he will even finish this term. How that happens is anyone’s guess, but sometimes small leaks sink big ships. And sometimes people get pushed overboard. View from the crow’s nest looks a lot like uncharted waters.

#22 spaced out on 07.30.22 at 2:39 pm

Lol so, your work consists of finding the 5 periods where the markets were down first half of the year, and extrapolating the second half will be up similar to those previous 5 episodes.

Wow. That’s a lot of hard work that went into that analysis.

#23 ElGatoNeroYVR on 07.30.22 at 2:43 pm

#18 Dragonfly58 on 07.30.22 at 2:08 pm
===========
As an imigrant of Eastern Europen descent I can acknowledge your broad perspective and generalization of the community as pretty much spot on at macro level. Ofcourse there are exceptions .
From the other side of the fence we find a lot of the locals to be mostly disconnected with and idealistic about the world at large :-) . Western nations have been very insulated after WW2 and evolved in a bubble so developed vastly different social / cultural environments which take a while for any newcomer to navigate. Most 1st generation will never fully integrate,however will bring a different perspective.
The great thing though in my experience is that majority of Canadians have a good attitude at helping the newcomers integrate and fostering positive dialogue: Merge vs. Assimilate.
In the end as long as people talk to each other and aknowledge that it is OK to have different points of view ( legal of course) we will all move ahead together . Cancel culture and the trend of ” the other side is evil” is the enemy ,not another (flawed as it may be) another person.

#24 Ponzius Pilatus on 07.30.22 at 2:53 pm

#17 Victor Llearna on 07.30.22 at 1:56 pm
Considering how Trudeau runs canada its shocking that the Canadian TSX isn’t back down in the 11000s back where it was 10 years ago.
————-
Yeah,
That shows you that he and Christy are actually doing a decent job, given the cercumstances.
Definitely better than many other countries.
Still one of the best places to live.

#25 Flop… on 07.30.22 at 3:01 pm

I guess the CIBC dividend fund I chose for Mrs Flop a couple of weeks is going alright, as it’s been a while since she tried to choke me out on the couch.

I might make a few more moves this summer, as when you get paid for your consultation fees in Icecream, what’s the point of waiting to wintertime?

You know the old saying, a bowl of Icecream in the summertime, is worth two in the winter…

M48BC

#26 willworkforpickles on 07.30.22 at 3:01 pm

BANNED (Abusive)

#27 Quintilian on 07.30.22 at 3:04 pm

#15 Philco on 07.30.22 at 1:33 pm

“There’s a large population that own their home outright.
That will support the market.”

Faulty logic.

Those who are not in the market do not affect prices.

Speculators, the highly leveraged, recent entrants, multiple unit holders with negative cash flow, will not receiver much compassion from potential buyers who have had the discipline not to buy until now.

#28 Grunt on 07.30.22 at 3:05 pm

https://www.theguardian.com/global-development/2022/jul/28/water-is-the-real-thing-but-millions-of-mexicans-are-struggling-without-it

Mexico needs a good dose of socialism. Did you see this? The peoples taps are dry while large corporations draw from private wells. Disgraceful.

#29 Love_The_Cottage on 07.30.22 at 3:08 pm

#17 Victor Llearna on 07.30.22 at 1:56 pm
Considering how Trudeau runs canada its shocking that the Canadian TSX isn’t back down in the 11000s back where it was 10 years ago.
_______
Interesting. So your view doesn’t match those who are investing in Canada or those who see it as the best country in the world to live in:

https://www.usnews.com/news/best-countries/rankings/quality-of-life

I’m going outside to enjoy the long weekend in this great country and count my blessing. I recommend others do the same, you’ll be happier and live longer.

Cheers everyone.

#30 Joseph R. on 07.30.22 at 3:16 pm

#17 Victor Llearna on 07.30.22 at 1:56 pm
Considering how Trudeau runs canada its shocking that the Canadian TSX isn’t back down in the 11000s back where it was 10 years ago.

———————————————–
Why would the TSX be affected by who is the Prime Minister?

#31 Happy Summer on 07.30.22 at 3:32 pm

Hope everybody has a beer or two in their hand… you too Garth… nothing else really matters does it.

#32 Keith on 07.30.22 at 3:36 pm

Don’t worry too much about all the free money the U.S. Government handed out. Some of it landed in Jimmy Pattison’s pocket.

https://www.castanet.net/news/BC/377891/Jim-Pattison-Bright-spots-in-economy-remain-but-labour-trend-is-key?fbclid=IwAR3FyKJ-RJDObX4kQ-qaDBB1d2CwtkczqPOU1XUcVBsSrfeucwHqrpM1eB8#377891

#33 Dogman01 on 07.30.22 at 4:35 pm

Decent summary\opinion\analysis:

The Recession is already here:
https://www.youtube.com/watch?v=HXm6w8ITWaI

Central Banks are political.
Central Banks no longer have a dial, debt loads are too high, all they are left is an On-Off Switch.

Economy On
Or
Economy Off

If you observe the Biden Admin scrambling to re-define Recession you can see how political things will get leading up to the US Midterms.

#34 Flop… on 07.30.22 at 4:54 pm

I have an advantage over you North American guys, being from Tasmania, I can see 18 hours into the future.

Are we gonna belt some real estate buttocks on here tomorrow?

You betcha…

M48BC

////////////////////////////////////////////////

“40 Cities That Could Be Poised For a Housing Crisis
Are some American cities in danger of another housing crisis?

The median home sales price in 2021 jumped 16.9% over the 2020 price to 346,900 – the highest increase since 1999, according to the National Association of Realtors. But with mortgage interest rates climbing, the organization’s chief economist anticipates home sales will slow in 2022.

But the slowdown might already have landed on the doorstep in some cities, according to a new study from GOBankingRates.

Using data from sources that include the U.S. Census Bureau, the Consumer Financial Protection Bureau, the 2020 American Community Survey and RealtyTrac, GOBankingRates identified the 40 cities most at risk for experiencing a widespread housing crisis. The study examined factors such as mortgage delinquencies, foreclosures and homeowner and rental vacancy rates. 

All 40 are among the 200 largest cities in the country, but they aren’t spread out equally across the nation. They are concentrated in 18 states, with only one state in the West.”

Miami, Florida

* % of homes for sale that are/have been foreclosures: 69.72%

Houston, Texas

* % of homes for sale that are/have been foreclosures: 73.98%

New York, New York

* % of homes for sale that are/have been foreclosures: 70.88%

#35 Linda on 07.30.22 at 4:54 pm

Ryan, I do hope you are correct with your forecast of a market rebound into 2023. What with all the negative news over the past couple of years, any positive news is more than welcome. I like that you base your predictions upon factual research. Much better probability they will come true that way:)

#36 Flop… on 07.30.22 at 4:57 pm

I have an advantage over you North American guys, being from Tasmania, I can see 18 hours into the future.

Are we gonna belt some real estate buttocks on here tomorrow?

You betcha…

M48BC

////////////////////////////////////////////////

“40 Cities That Could Be Poised For a Housing Crisis
Are some American cities in danger of another housing crisis?

The median home sales price in 2021 jumped 16.9% over the 2020 price to 346,900 – the highest increase since 1999, according to the National Association of Realtors. But with mortgage interest rates climbing, the organization’s chief economist anticipates home sales will slow in 2022.

But the slowdown might already have landed on the doorstep in some cities, according to a new study from GOBankingRates.

Using data from sources that include the U.S. Census Bureau, the Consumer Financial Protection Bureau, the 2020 American Community Survey and RealtyTrac, GOBankingRates identified the 40 cities most at risk for experiencing a widespread housing crisis. The study examined factors such as mortgage delinquencies, foreclosures and homeowner and rental vacancy rates. 

All 40 are among the 200 largest cities in the country, but they aren’t spread out equally across the nation. They are concentrated in 18 states, with only one state in the West.”

Miami, Florida

* % of homes for sale that are/have been foreclosures: 69.72%

Houston, Texas

* % of homes for sale that are/have been foreclosures: 73.98%

New York, New York

* % of homes for sale that are/have been foreclosures: 70.88%

https://www.msn.com/en-ca/money/finance-real-estate/40-cities-that-could-be-poised-for-a-housing-crisis/ss-AAY0dRH?li=AAggNb9

#37 Dogman01 on 07.30.22 at 4:57 pm

#105 Cici on 07.30.22 at 9:55 am

“If the entire world looked the same, everyone spoke the same language and had the exact same mindset, there’d be nothing to learn, share or discover. There would be no reason to travel, explore or indulge. The result would be a homogeneous nightmare.”

————————————————-

Good observation.
I have noticed that in our current dominant culture zeitgeist:

– Preserving or extolling one’s culture has become racist only when it is concerned with preserving or extolling a sub-set of particularly western culture.
– The concept of “luxury values”, where successful people publicly support a set of values that they would not adhere to and those values they pro-port to support more often create chaos and poverty rather than success. (I can think of no greater maliciousness than telling a young person that “X” is righteous while full well knowing it will likely usher in a life of grief and struggle)

A successful culture is one that adapts to the social and physical environment to support widespread prosperity and health. Western Culture historically led the way at least on the prosperity front.

Some think promoting Western Cultural values and historical virtues is somehow “racist” but I can think of no culture that is less racist and more tolerant than Western Culture. Things can always be better but today their seems to be a fad of a critique comparing a real society to an imagined utopia.

“Racism does not have a good track record. It’s been tried out for a long time and you’d think by now we’d want to put an end to it instead of putting it under new management. ” — ― Thomas Sowell

#38 Inequity on 07.30.22 at 5:17 pm

#30 Joseph R.

Did you read the part of the article where they mentioned S&P500 performance based on presidential cycle?

Of course the leader impacts the market of a country.

Not that I agree with Victor. He is letting his dislike of T2 cloud his judgment.

#39 Tony on 07.30.22 at 5:30 pm

Re: #19 Ryan Lewenza on 07.30.22 at 2:09 pm

I’m shorting the market at the very end of 2022. The indexes should get creamed the first two weeks of January 2023. I went long silver last week.

#40 Shirl Clarts on 07.30.22 at 5:38 pm

Excellent post, Ryan. Just be careful with the Putin trash talk or he’ll sanction you. I haven’t sold anything, just waiting for the recovery. And a crazy bump in preferreds on Friday. If you have cash right now, I’d be worried about missing the bottom (Which might be in the rear view).

#41 Flop… on 07.30.22 at 5:51 pm

Now let’s have a look at the other side of the real estate coin.

I don’t remember what the chick in the movie “When Harry Met Sally” ordered in the diner scene, maybe it was a slice of Over Optimistic Pie…

M48BC
————————————————————————————

‘Don’t try to time the market’: What the interest rate hike means for B.C. real estate

Some markets cooled after the boom during the COVID-19 pandemic, but overall, prices have remained elevated since the start of the year.

“The trend is still towards higher prices, especially in suburbs where younger and first-time home buyers are looking to escape competitive metropolitan areas now that remote work has become more common. What will be interesting is to compare the data we’ve received from the first half of this year with the data we gather in 2023 to see how the rising rates impact the market for the next six months,” says Rushton.

“There are some markets like Victoria still rising month over month, some of the markets in the north or the Interior are still you know, basically, flat or slightly up,” he says. “Then we have some markets, like Chilliwack, or other parts of the Fraser Valley that saw the most kind of excessive run up especially at the end of 2021 and the start of 2022 that are starting to see prices come down a bit.”

https://www.vancouverisawesome.com/highlights/dont-try-to-time-the-market-what-the-interest-rate-hike-means-for-bc-real-estate-5640266

#42 Ponzius Pilatus on 07.30.22 at 6:52 pm

28 Grunt on 07.30.22 at 3:05 pm
https://www.theguardian.com/global-development/2022/jul/28/water-is-the-real-thing-but-millions-of-mexicans-are-struggling-without-it

Mexico needs a good dose of socialism. Did you see this? The peoples taps are dry while large corporations draw from private wells. Disgraceful.
——————-
Yep.
And all the Western Xpats who take far too many showers.
Water is the oil of the future.
Glad that Canada has lots of it.

#43 The dumb and the numb on 07.30.22 at 6:55 pm

#24 ponzi pilatius

Yeah,
That shows you that he and Christy are actually doing a decent job, given the cercumstances.
Definitely better than many other countries.
Still one of the best places to live.

……..
Good place to live yes, but under attack by incompetency.
Once again you have displayed the air space really does exist between your ears.
We know it well!

#44 Shirl Clarts on 07.30.22 at 6:56 pm

#41 Flop… on 07.30.22 at 5:51 pm
Now let’s have a look at the other side of the real estate coin.
^^^^^^^
Article paid for by the real estate cabal. C’mon Flop.

#45 Penny Henny on 07.30.22 at 7:02 pm

* The Presidential Cycle posits that there is a loose connection between the US President’s four-year term and the US stock markets. President’s want to get re-elected so they try to goose the economy in years 2 and 3 to improve their odds of a re-election.-RL
//////////////////////////

What about when you have a lame duck president?

#46 Government Shill on 07.30.22 at 7:03 pm

Pop *snort*.

Soda!

#47 Penny Henny on 07.30.22 at 7:13 pm

#18 Dragonfly58 on 07.30.22 at 2:08 pm
Stone, you don’t have a clue about me. Not a clue.
Perhaps some would interpret my comments as racist, you obviously have.
Considering I worked with a large number of immigrants over a long period of time and never had any suggestion from any quarter that I was a racist strikes me as more important than a judgement you came to based on a couple of internet comments.
You are the one with problems.
Such a harsh , snap judgement arrived at based on almost nothing.
I will give that we all have a certain amount of cultural bias based on our life experience.
But if you actually spent more than 20 seconds getting to know me you would see that it is your own preconceived notions that led to your statement. I know the life I live is far from perfect , but racist ? You are so far off the reality of my life you redicule yourself.
///////////////

Stone is an lackey and a SJW wanna be.

#48 mj on 07.30.22 at 7:13 pm

If the states are in a recession, and the Federal Reserve keeps raising interest rates to slow down the economy. Both Jerome Powell, and Tiff said they want to slow things down. Doesn’t that mean things will get worse before they get better?

#49 Wrk.dover on 07.30.22 at 7:20 pm

I have been ratcheting up my repurchasing and new purchasing, a little more so lately. Especially earlier this week.

I’d hate to miss the bulk of the rise, if the rise is to a lesser level than the previous high.

On the other hand, a further drop can’t cause as much pain on cash that has been in limbo this year.

Whole Market Index funds give me the chills though, not all boats in the fleet will be refloated equally, we shall see.

Low to no dividend ETF’s and equities, nope to either too.

#50 TurnerNation on 07.30.22 at 8:23 pm

#99 Bad Gas on 07.30.22 at 6:03 am

^^ Welp the two main countries in WW2 were Germany, Italy. If WW3 did being March 2020 the two main countries in the news over the past two years are…..?

—–
Little reminder to keep an eye on the Land. In 2020 we were banned from local parks, National and Provincial ground, beaches; sports fields , golf and the tennis courts. Boat launches and camping grounds as well.
Police were tasked with ticketing those sitting down on the park benches.
I’d opined that wars are fought over LAND.

Robot dogs…so this is their first deployment. What else can they do?

https://www.bbc.com/news/uk-england-nottinghamshire-58906285
Nottinghamshire County Council said the work would make it the world’s first 5G-connected forest.
The authority hopes the stronger signal can be used to offer visitors an augmented reality headset to view an immersive Robin Hood-themed film.
The drones and robot could be used to help with environmental research.

— Watch the food supply.

https://www.foxnews.com/politics/billionaire-funded-eco-group-quietly-taking-farmland-out-production-rural-america
Published July 29, 2022 2:00am EDT
The American Prairie (AP), a conservation project in Montana, has quietly scooped up more than 450,000 acres of land with the help of its billionaire donors and the federal government.
The little-known project aims to create the largest “fully functioning ecosystem” in the continental U.S. by stitching together about 3.2 million acres of private and public lands, according to the American Prairie Foundation, which founded the reserve more than 20 years ago. The group has recorded 34 transactions spanning roughly 453,188 acres of land throughout central Montana — much of which were once used for farming and grazing — since 2004 and continues to aggressively expand.

#51 Yukon Elvis on 07.30.22 at 8:34 pm

#21 the Jaguar on 07.30.22 at 2:31 pm

My spidey sense also tells me the Dems are rolling out a new, not so subtle strategy to get Joe B. to step aside.

Hiding in plain sight, it’s “Joe’s got to go”, everywhere I look. I seriously doubt he will even finish this term.

How that happens is anyone’s guess, but sometimes small leaks sink big ships. And sometimes people get pushed overboard. View from the crow’s nest looks a lot like uncharted waters.
++++++++++++++++++++++
President Harris will do an awesome job.

#52 Stealth on 07.30.22 at 9:39 pm

Thank you Ryan.

Regarding current conflict in Europe and taking the emotion out for a moment, what is its impact on the global markets? Economies of conflicting parties are relatively small and conflict is regional. Haven’t been able to find any real quantification, you probably have more information on this.

Reason for my question is really about when peace finally arrives and it will, what kind of positive boost could this represent.

Thank you

#53 Philco on 07.30.22 at 9:54 pm

#27 Quintilian on 07.30.22 at 3:04 pm
Faulty logic.

Those who are not in the market do not affect prices.

Speculators, the highly leveraged, recent entrants, multiple unit holders with negative cash flow, will not receiver much compassion from potential buyers who have had the discipline not to buy until now
————————-
There’s late buyers and speculators. I said that before many times here.
Your talking to someone that’s is a clown most days. But now going to push $15mil in RE now debt. Not many can school me cause I came from the trenches…ugly ones.
In the end it ain’t the majority that are specs that’s my point.
My town Powell River spec is none existent.
I know ALOT of people and I know not one person facing issues or would be facing default.
I wouldn’t worry about it unless you were an idiot that last few years.

Chinas up shit creek we are not..Looks good on them…clown action all over.
We shale see…..it takes 50yrs to pay for a crap home.
Insane….If you have time.
https://www.youtube.com/watch?v=dnp_MxXY9qs
Their so corrupt no humans rights and outright ABUSE and T2 bows to them.
I don’t even know what to say to people that voted for T2. Grab a set dude.

#26 willworkforpickles on 07.30.22 at 3:01 pm
BANNED (Abusive)
What’s the matter with you dude? Change your handle and email or take a long walk off a short pier.

#54 Philco on 07.30.22 at 10:25 pm

https://www.youtube.com/watch?v=lkOQNPIsO-Q

You know nothing.

#55 Philco on 07.30.22 at 10:37 pm

If you miss that vid above poor you.
I knew this 20 years ago when i woke up.
My setup kills the market cause I dig the holes and am the mule busting my sorry ass back, building myself lowering cost of the projects in a big way. My yield on my properties is large because of this.
What I’m saying is many cant do what I do so don’t fail at the above. You will never recover.
I can fall drunk in a ditch for a month or 6 and on the 30th a pile of loot hits my account.
Don’t F up your stock port. GREAT advice in the vid!! Folks…

#56 crowdedelevatorfartz on 07.30.22 at 11:41 pm

@#53 Philco

Yeah.
Evergrande is the tip of the Chinese Property bust iceberg.

And their western auditor PwC gave no warning ?
Reminds me of Enron and Arthur Anderson.

#57 Swinging Sue on 07.31.22 at 12:05 am

“The Presidential Cycle”, yes indeed. Usually a period of mass pork spending and excess pandering . But, having thrown another $400 billion onto the bonfire this past week and inflations gasoline too close to the blaze I wonder whether we can expect ‘the same’ through the cycle or whether we can look forward to a different outcome, one of riot theater and economic conflagration? After all , how do you redefine poverty. Is it as easy as refining recession? Will it be a 20% inflation rate that forces us to rename poverty to something like “unproductive mouths”. It’s happened before battle lines were being drawn. The result was war. Is the cupboard bare this time. We new tactics and phrases be called up to the front? I wouldn’t rely on the “P Cycle” as a guide this time around, because this time, it’s different.

#58 Leo Trollstoy on 07.31.22 at 1:03 am

Summary:

“Nobody knows nothin” – John Bogle

“Past performance is not indicative of future results”

#59 willworkforpickles on 07.31.22 at 1:11 am

BANNED (Abusive)

#60 RichardTO on 07.31.22 at 1:36 am

Mr. Fluenza, do your calculations include the possibility of the US permanent government bureaucracy starting a barbaric war with China?

#61 DOWn on 07.31.22 at 1:48 am

Things would of been much worse and the pain way sooner if not for the billions of dollars that’s been injected into the markets by the Fed..

And I’m still not sure how that’s even fair, dare I use that term towards the people who “bet” against the markets which have been continually bailed out, or shut down while dumping.

Anyway , I was one of those people and it pissed me off.

I’m convinced we are heading into a deflationary trend once the smoke settles.

#62 Shawn on 07.31.22 at 6:37 am

Second half stock returns?

We are a month in and “so far, so good”.

I like owning profitable companies. Works for me. Good morning from Port Bickerton Nova Scotia. Waterfront is cheap here.

Buy low and hold.

#63 Ryan Lewenza on 07.31.22 at 7:26 am

RichardTO “ Mr. Fluenza, do your calculations include the possibility of the US permanent government bureaucracy starting a barbaric war with China?”

No they do not and I see this as a low probability event. I understand the tensions between the two countries but neither want a war. – Ryan L

#64 Ryan Lewenza on 07.31.22 at 7:34 am

Stealth “ Thank you Ryan. Regarding current conflict in Europe and taking the emotion out for a moment, what is its impact on the global markets? Economies of conflicting parties are relatively small and conflict is regional. Haven’t been able to find any real quantification, you probably have more information on this.”

The impact of the war is twofold. First, the war has dramatically weighed on economic activity. For example Europe was projected to grow at 4% this year and now its expected to grow 1-2% post the war. Second, it’s exacerbating the inflation problem by pushing up oil, natural gas and other commodities. This has then forced the Fed and BoC to hike by 75-100 bps versus their typical 25 bps hikes. – Ryan L

#65 Prince Polo on 07.31.22 at 8:04 am

Debbie would like your help. No money. Just your voice. Here’s the site. Thank you.

For us uncool & uncouth backwards heathens who don’t have Facebook, is there an alternate website? Asking for a friend???
D’oh!

#66 Jasmin on 07.31.22 at 8:08 am

Inflation will get worse by year end. US Inflation will be 10% and Canada 9%. This means 7% mortgage rates and 8% lines of credit rates, 10% reverse mortgage rates and finally 5% provincial bond rates, 6% GIC rates.

#67 Dharma Bum on 07.31.22 at 9:23 am

#1 Paddy

So we are due for a rally 2023, Roger that. That’s a big 10-4 rubber ducky.
———————————————————————————————————-

Breaker 1-9 Rubber Ducky! Watch out for them bears at yer back door. How’s it lookin’ over yer shoulder? Catch you on the flip flop.

https://www.youtube.com/watch?v=Sd5ZLJWQmss

#68 crowdedelevatorfartz on 07.31.22 at 9:37 am

@#62 Shawn.
“Good morning from Port Bickerton Nova Scotia. ”

+++
Is that where the Bickersons live?

#69 crowdedelevatorfartz on 07.31.22 at 9:40 am

@#59 Smoking Pickles
Banned

++++
Judging from the endless, daily , BANNED deletions…

Is this the the first time in your life you’ve ever been told, “No.”?
:)
Denial is not just a river.

#70 inflation is rampant on 07.31.22 at 9:42 am

you’re fighting the FED Ryan. don’t fight the fed. they want inflation lower. and they will raise until they get what they want.

#71 willworkforpickles on 07.31.22 at 10:59 am

BANNED (Abusive)

#72 Damifino on 07.31.22 at 11:38 am

#58 Leo Trollstoy

“Past performance is not indicative of future results”
————————————-

That would make a great footnote on a resume.

#73 Philco on 07.31.22 at 11:44 am

#56 CEF

CCP are out in full force covering up info trying to escape their grasp. I think the billions could rise up and move against them. The new generation are not as fearfully as the older gen. They have tech on their side. Although sqelched theres going to be breakouts…Tiananmen square will not be repeated as the world would be watching. Lets support those people that want to be free of the shackles of the CCP. Their censorship and the abuses of human rights.

#74 PBrasseur on 07.31.22 at 1:17 pm

US household debt to GDP is near all time low, companies have piles of cash, those are among the positive signs.

Big problem is still inflation and this is not helping to curb demand. People heave the means to spend and businesses the means to keep manpower pressure high.

This leads to the biggest losers being those with most vulnerable with debt, so Europe is in trouble and Canada will be if inflation continues and rates keep rising.

#75 Damifino on 07.31.22 at 1:30 pm

#73 Philco

The new generation are not as fearfully as the older gen. They have tech on their side.
———————————-

Nonsense. They’re scared silly and “tech” is most certainly not their friend.

#76 crowdedelevatorfartz on 07.31.22 at 1:56 pm

@#73 Philco
“Tiananmen square will not be repeated as the world would be watching.”
+++
The CIA noted that trainloads of Chinese Army troops were held back, isolated from any news of the mass protests before the massacre in Tiananmen.
They were also reportedly given “vitamins” as a boost before the fighting.
Several military experts believe the “vitamins” were methamphetamines used to boost aggression and keep them awake.
The troops did as they were told and opened fire on hundreds if not thousands of unarmed citizens.
Would a massacre like that be kept under wraps today?
Hard to say.
Tiananmen, Tibet and Taiwan are the 3 “T”s that the Communist leadership will allow zero dissent.

Interesting times.

#77 Brian on 07.31.22 at 2:42 pm

How Much of “Inflation” Is the Price Being Jacked Up Under the Excuse of “Inflation”?

https://charleshughsmith.blogspot.com/2022/07/how-much-of-inflation-is-price-being.html

#78 Victor Llearna on 07.31.22 at 3:39 pm

I see there are actually people that read this blog and are actually Trudeau supporters??! I can’t understand why anyone with a non government job or isn’t on welfare could ever support that guy. His carbon taxes and out of control spending are killing Canada. The TSX is up DESPITE Trudeau’s incompetence.
China releases more carbon in a few days than Canada in an entire year, and Russia oil causes more pollution on extraction than canadian oil. Carbon taxes of any kind make zero sense.

#79 KLNR on 07.31.22 at 4:35 pm

@#78 Victor Llearna on 07.31.22 at 3:39 pm
I see there are actually people that read this blog and are actually Trudeau supporters??! I can’t understand why anyone with a non government job or isn’t on welfare could ever support that guy. His carbon taxes and out of control spending are killing Canada. The TSX is up DESPITE Trudeau’s incompetence.
China releases more carbon in a few days than Canada in an entire year, and Russia oil causes more pollution on extraction than canadian oil. Carbon taxes of any kind make zero sense.

actually, regardless of your political stripe this is a simpleton take actually. I’m guessing you actually don’t understand much.

#80 Moral majority on 07.31.22 at 5:46 pm

#79 KLNR
@#78 Victor Llearna on 07.31.22 at 3:39 pm
I see there are actually people that read this blog and are actually Trudeau supporters??! I can’t understand why anyone with a non government job or isn’t on welfare could ever support that guy. His carbon taxes and out of control spending are killing Canada. The TSX is up DESPITE Trudeau’s incompetence.
China releases more carbon in a few days than Canada in an entire year, and Russia oil causes more pollution on extraction than canadian oil. Carbon taxes of any kind make zero sense.

actually, regardless of your political stripe this is a simpleton take actually. I’m guessing you actually don’t understand much.

——

KLNR, Obviously you are on of those on a government tit.

#81 Ronaldo on 07.31.22 at 10:23 pm

https://www.cbc.ca/news/canada/ottawa/wollaston-nellie-lunn-park-sale-1.6537719

Another gem going up for sale. Wonder how much support this one will get.

#82 Philco on 08.01.22 at 9:31 am

75 Damifino on 07.31.22 at 1:30 pm

I know a few and their options differs from yours.
Protest were already going fwd over RE and that was illegal. They certainly wouldn’t have pulled that a year after T Sqaure.
I married to a Flip. The despise China and fear they could move on the Philippines in the future.

CEF
Yes same as they fed the Gremans.
Yup super interesting!!

#83 Philco on 08.01.22 at 9:36 am

75 Damifino on 07.31.22 at 1:30 pm

Have ever been to China?
I have and Philippines numerous times.
China sucked. Dealing with the airport is ugly.
I wouldn’t step foot back in for all the Tea in China. Lol
Maglift was OK

#84 Flop… on 08.01.22 at 7:49 pm

I’ve done some pretty stupid things in my life, like moving to France and not speaking French, for example.

So out of 10, how stupid would it be for a guy who grew up in Australia to move to New Brunswick, when I’m not fluent in Snow?

In the background, I’ve been mulling a move for a while, smaller places than Vancouver in BC, was the first option, but cost of living, Bush fires, number of pricks per one hundred people, yada, yada, all had to be considered.

I think if I’m going to put the effort in to moving again, something that used to be more natural and regular, I want to have a dramatic new life experience, not just a parallel version of before.

I guess Australia is always the ultimate back up option, but Mrs Flop can’t stand the heat and is the only person I’ve ever met that calls 17 degrees muggy.

I would mainly do it for a dramatic lifestyle change and access to the Eastern Seaboard of the U.S, which hasn’t always been that easy to explore for a budget traveller from Vancouver.

Guess I’ll get that pesky real estate out of the way first.

So when I was messing around yesterday I found this affordable option in

Saint John for 219k for 1000sq ft, which is o.k just for two people.

https://www.realtor.ca/real-estate/24608433/4-breen-lane-saint-john

After living in Vancouver for 2 decades, and sort of becoming numb to seeing obscene real estate prices, was still surprised despite the national run-up, to see this house for 1.6 being the most expensive in one of the province’s main markets.

How many months of the year would you get to use a pool in New Brunswick?

https://www.realtor.ca/real-estate/24460076/1-sunset-boulevard-fredericton

Job market, slim pickings for my trade, definitely lower wages than Vancouver, but I guess it mirrors the cost of living.

Checked government jobs, didn’t see anything I was qualified at, seeing a carpenter job in this section for roughly $23.50 made me realize what I might be up against.

Medical care, according to these guys, I already live in one of the best places to retire in Canada, so aging in place, and a continuation of what I’m already doing in not the worst thing, but I feel like I’m ready for a new chapter in my life to begin.

https://www.savvynewcanadians.com/best-places-to-retire-in-canada/

Fredericton, NB, came in at number 6 overall.

* “Doctor per 100,000 people: +120.

Fredericton is a small city that offers great amenities. It is the capital city of New Brunswick, a province that aims to take good care of the senior community.”

Saint John, NB, came in at number 9

* “Doctor per 100,000 people: 86.

Right now, Saint John in New Brunswick offers the lowest real estate prices in Canada. It’s also known to be full of the happiest people in Canada. Saint John is right on the Bay of Fundy in Atlantic Canada.”

Dunno, they said Vancouver is a great place to receive medical treatment and everyone I know here complains about it, but that could just be that West Coast bitchyness coming out for a run.

For the potential deal breaker I went to these guys to get the snow-down, low-down.

https://www.currentresults.com/Weather-Extremes/Canada/snowiest-cities.php

I found it depressing, Moncton and Saint John were both in the amount of snow top ten.

The only glimmer of hope I saw is they didn’t feature on the most days of fresh snow, and longest lasting snow tables, which to me indicated that in New Brunswick the snow just magically disappears…

M48BC